Inflation, stagflation, recession? What will shape Asia’s economic and investment outlook for the second half of 2022


Wei Yao, Chief Economist and Head of Research, Asia Pacific and Frank Benzimra, Head of Asia Equity Strategy, recently shared their views on the economic and investment outlook for the second half of 2022.

In their latest reports, they covered a range of key topics including inflation, the risk of recession in the global economy and latest monetary policies, portfolio strategies as well as Chinese equities and bonds. Key takeaways include: 
•    Ease on headline inflation in large advanced economies over the next six months: But with upstream price pressures still strong and growing signs that wages are following them up, decline will likely be slow and only partial. 
•    Recession will likely come but not too soon and would be dependent on three risk factors: Additional exogenous inflation shocks, China economic lockdowns and a serious financial market plunge. 
•    The most significant change in our economists' forecasts over the past three months has been to the monetary policy outlook, with several rate hikes expected this year until a clear downward trend in inflation emerges. 
•    External risks including the dollar, US financial conditions and recession-create dispersion between China and the rest of emerging markets in Asia will likely last in the third quarter.
•    Going forward, high inflation and accelerated monetary policy tightening are likely to weigh on growth prospects. Reducing portfolio risk remains the key theme in the current market environment.

Click the below to read our latest research:
Global Economic Outlook Report – Central Banks and the Wild Goose Chase
Multi Asset Portfolio Report - From stagflation concerns to credit worries: steer clear of risk

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